Governor’s 2024 Budget – What It Means for Counties

Governor Wes Moore unveiled a $63.1 billion fiscal 2024 budget proposal he calls a bold reflection of his priorities — education, transportation, and public safety — while being fiscally responsible.

The proposed budget, which does not include a tax increase, maintains a Rainy Day Fund at the target level of 10 percent of General Fund revenue or $2.5 billion and, to account for economic uncertainties, a higher-than-normal budgeted General Fund balance of $820 million for fiscal 2024.

The spending plan reallocates $500 million to the Blueprint for Maryland’s Future. In addition, it sets aside $500 million of the budget surplus for new investments in strategic transportation projects across the state (to be determined later). It also proposes accelerating Maryland’s minimum wage to $15 per hour as of October 2023 and indexing the wage to inflation in future years.

What’s It Mean for Counties?

The governor’s proposed budget provides $10.4 billion in aid to local governments — $885.2 million over fiscal 2023. The primary increases include $784.3 million for K-12 education, $57.2 million for transportation, and $41.0 million for community colleges.

Community Colleges

The proposed budget includes $393.3 million provided through the Cade formula. This $38.2 million annual increase in funding reflects an 18.5 percent increase in State support per student at local community colleges. In addition, the governor’s proposed capital budget includes $78.5 million for community colleges.

K-12 Education

The governor’s budget proposal includes $8.8 billion for K-12 education — funding Blueprint for Maryland’s Future programs and exceeding statutory funding formulas with $37 million in education hold-harmless grants. As a result, per-pupil funding for K-12 education grows from $9,199 to $10,015, an increase of 9 percent.

The proposed budget also includes a proposal to allocate $500 million in surplus General Fund cash to contribute to the Blueprint for Maryland’s Future Fund to extend the fund’s solvency an additional year through fiscal 2026.

Transportation

The governor’s proposed budget includes $331 million in formula-driven funding for Highway User Revenues — a $51.9 million increase from fiscal 2023.

Local governments – specifically, counties – maintain the lion’s share of the state’s roads and bridges. Unlike most other states, in Maryland, local governments own and maintain 83 percent of the roads.

HB 1187 / SB 726 of 2022 increased local jurisdictions’ highway user revenues by an estimated $51.9 million in fiscal 2024, $190.3 million in fiscal 2025, $241.5 million in fiscal 2026, and $245.6 million in fiscal 2027.

The motor vehicle fuel tax, motor vehicle registration fees, a share of the motor vehicle titling tax, and a share of the corporate income tax are designated as Highway User Revenues (HUR). The State allocates a portion of these revenues to the counties and municipalities to help fund the construction and maintenance of local roads. Baltimore City receives 9.5 percent in fiscal 2024. The remaining counties and municipalities receive 3.7 percent and 2.4 percent in fiscal 2024.

Grants are provided to fund local transportation services for elderly and disabled persons, with 60 percent of the money distributed equally among the counties and Baltimore City and 40 percent based on the distribution of the elderly and disabled populations. In addition, funding is included to help defray the cost of providing paratransit services required under the federal Americans with Disabilities Act.

Police Aid

The proposed budget includes $122 million in aid to local police departments, including $17.5 million dedicated to Baltimore City. In addition, the proposed budget provides nearly $69 million in direct local law enforcement grants.

The State gives grants to local governments to help provide police protection services, which are distributed through a formula Governor’sopulation and population density. Grants are shared between counties and municipalities based on expenditures, and cities receive an additional grant based on the number of police officers. The proposed budget provides $45.9 million in enhancement funding above the mandated formula, including $17.5 million for Baltimore City.

 

Local Health Departments / Disparity Grants 

The governor’s proposed budget includes record funding for local health departments, which grows to nearly $116 million, a $41 million increase from fiscal 2023. In addition, the proposed budget includes $167 million in formula-driven funding for the Disparity Grant program for low-wealth jurisdictions — a $17 million increase from fiscal 2023.

School Construction

The proposed budget includes more than $1 billion for school construction, including $485 million for the Public School Construction Program, exceeding the $450 million goal outlined in HB 1290 of 2022.

In addition, the proposed budget includes $447 million in revenue bonds for the Built to Learn Act initiative. A total of $888.6 million in fiscal 2024- 2026 to complete the State’s $1.6 billion initiative to use the Education Trust Fund to enhance school construction funding. It also includes $90 million for the Healthy School Facility Fund and $40 million for the Supplemental Capital Grant Program to address additional school construction needs across the state.

What’s Next?

By custom, the House and Senate move the budget bill in alternate years – the House moves the budget in odd-numbered years, and the Senate moves the budget in even-numbered years. So, for example, the budget bill will start in the House this year.

Stay tuned to Conduit Street for more information.

Useful Links

Proposed Budget Documents (fiscal 2024):

Budget Highlights

Proposed Operating Budget Detail by Agency

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